Taxation · Returns

Late Fee, Interest, Nil Returns and Return Compliance under GST

Updated 4 October 2026 · Fact-checked

Late fee under Section 47 is charged per day of delay in filing a return, and interest under Section 50 is charged at 18% a year on tax paid late. Nil returns must still be filed. Non-filing can block GSTR-1, outward e-way bills and risk cancellation. Count days from the day after the due date.

Understand Late Fee, Interest, Nil Returns and Return Compliance

A registered person must file returns on time even when there is no business. Delay has two separate costs. Late fee is a penalty for not filing the return. Interest is the cost of using the government's money by paying tax late. They are different, and you can be charged both.

Late fee (Section 47): The statute charges ₹100 per day under the CGST Act and ₹100 per day under the SGST/UTGST Act, so ₹200 per day in all, with a cap of ₹5,000 under each Act. The late fee runs from the day after the due date to the date the return is actually filed.

The Government has notified lower late fees for GSTR-1 and GSTR-3B. The notified rate is ₹50 per day (₹25 CGST + ₹25 SGST/UTGST) for normal returns and ₹20 per day for nil returns. These come with notified caps. In the exam, use the rate and cap given in the question. The statutory ₹200 per day (₹100 + ₹100) applies only when the question gives no rate.

Interest (Section 50): Interest is charged on tax that is not paid, or paid late, at 18% a year for the period of delay. Where the return is furnished after the due date, interest applies on the tax payable in cash, that is, the tax liability net of the ITC available in the electronic credit ledger. It runs from the day after the due date till the date the tax is actually paid. A higher rate of 24% a year applies under Section 50(3) to undue or excess ITC availed and utilised, and to undue or excess reduction in output tax liability. Both late fee and interest must be paid in cash. You cannot use ITC for them.

Nil return: If you made no outward supply, took no ITC and have no liability in the period, you must still file. A nil return shows zeros. Skipping it counts as default and attracts late fee.

Consequences of non-filing: A person who does not file may be stopped from filing later returns, such as GSTR-1 when earlier GSTR-3B is pending. Under Rule 138E, generation of outward e-way bills is restricted where a regular taxpayer has not filed GSTR-3B for a continuous period of two months or more, or a composition taxpayer has not filed the statement in Form GST CMP-08 for a tax period. The proper officer may cancel registration under Section 29 if a regular taxpayer has not filed returns for a continuous period of six months, or a composition taxpayer for three consecutive tax periods.

A time bar also applies to GSTR-1, GSTR-3B and the annual return. Under Sections 37, 39 and 44, as inserted by the Finance Act 2023, these cannot be filed after three years from the due date. It does not extend to every return, so check the notified provisions and the return named in the question.

Key rules to remember

Statutory late fee (Section 47): ₹100 per day (CGST) + ₹100 per day (SGST/UTGST) = ₹200 per day; maximum ₹5,000 under each Act; Counted from the day after the due date to the date of filing. Use this only when the question gives no rate. Notified rates for GSTR-1 and GSTR-3B are lower.
Notified late fee (GSTR-1 and GSTR-3B): Normal return: ₹50 per day (₹25 CGST + ₹25 SGST/UTGST); nil return: ₹20 per day; Subject to notified caps. If the question gives a rate and cap, use them.
Interest on delayed tax (Section 50): Interest = Tax payable in cash × 18% × Days of delay ÷ 365; Days run from the day after the due date to the date of payment. Where the return is furnished late, the base is the tax payable in cash, net of ITC available in the electronic credit ledger.
Interest on undue or excess ITC, or excess reduction in output tax: Interest = Undue or excess ITC availed and utilised (or excess reduction in output tax liability) × 24% × Days ÷ 365; The higher rate under Section 50(3) applies only to that amount, and for the period of the wrong use or reduction.
Nil return rule: No supplies + no ITC + no liability = nil return, still compulsory; Late filing of a nil return still attracts late fee, at the notified lower amount of ₹20 per day if the question gives it.
Registration cancellation trigger: Regular taxpayer: 6 continuous months of non-filing; Composition: 3 consecutive tax periods; Cancellation by the proper officer under Section 29.
E-way bill restriction (Rule 138E): Regular taxpayer: GSTR-3B not filed for a continuous period of 2 months or more; Composition taxpayer: Form GST CMP-08 statement not filed for a tax period; Generation of outward e-way bills is restricted till the default is cured.
Time bar on filing: GSTR-1, GSTR-3B and annual return: not after 3 years from the due date (Sections 37, 39 and 44, as inserted by the Finance Act 2023); Does not extend to all returns. Check the return and the notified provisions in the question.

How to solve Late Fee, Interest, Nil Returns and Return Compliance questions

Use this order for any question on late fee, interest or return default.

1Identify the return and its due date: GSTR-1, GSTR-3B, or another return. Note the actual date of filing or payment.
2Count days of delay from the day after the due date up to and including the date of filing or payment.
3For late fee, check whether it is a nil return and which rate the question gives. Apply CGST plus SGST/UTGST per day, then check the cap. Use the statutory ₹200 per day only if no rate is given.
4For interest, find the tax payable in cash, net of ITC available in the electronic credit ledger, where the return is filed late. Then apply 18% ÷ 365 per day from the day after the due date to the date of payment.
5Check if ITC was undue or excess and utilised, or if output tax liability was reduced in excess. If yes, use 24% on that amount only.
6State the other consequences: block on GSTR-1, e-way bill restriction under Rule 138E, cancellation risk and, for GSTR-1, GSTR-3B and the annual return, the three-year time bar, as asked.
7Write the section number, show the working in a line, and give a clear conclusion.

Quickest way: Late fee and interest in two lines

When to use it: Use this for MCQs and for the calculation part of written answers when the question gives dates and amounts.

MCQ: separate the two charges first. Late fee is per day and capped. Interest is a percentage of tax per year. Then find the days and multiply.
Do not include the due date in the count. For a due date of 20th and payment on 30th, the delay is 10 days.
For interest, strike off the ITC part first, and compute on the tax payable in cash when the return is filed late.
Eliminate any option that uses ITC to pay late fee or interest. It is not permitted.
Written answer format: provision, facts, working in one line, conclusion. Each of these earns step marks.

Common mistakes in Late Fee, Interest, Nil Returns and Return Compliance

Treating a nil return as optional.
Students think no liability means no filing duty.
Fix: Remember that Section 39 requires the return even with no supply. Late filing of a nil return still attracts a (lower) late fee.
Counting the due date as a day of delay.
Students count both ends of the period by habit.
Fix: Start from the day after the due date and include the day of filing or payment.
Charging interest on the whole tax liability, including the part paid from ITC.
Students apply the 18% rate to the total tax in the return.
Fix: When the return is filed late, charge interest on the tax payable in cash, net of ITC available in the electronic credit ledger.
Paying late fee or interest from the electronic credit ledger.
Students assume ITC can pay any dues.
Fix: Late fee and interest are paid only in cash through the electronic cash ledger.
Using only the CGST late fee of ₹100 per day.
Students forget the SGST/UTGST component.
Fix: Add both: ₹100 plus ₹100 per day, and apply the cap of ₹5,000 under each Act. If the question gives the notified rate, add both components of that rate too.
Mixing up 18% and 24% interest.
Both rates appear in Section 50.
Fix: 18% is for delayed payment of tax. 24% is for undue or excess ITC availed and utilised, and for undue or excess reduction in output tax liability (Section 50(3)).

Worked examples

Example 1

Mr. A is a regular taxpayer. His output tax for March was ₹5,00,000. He used ITC of ₹3,00,000 from the electronic credit ledger and paid ₹2,00,000 in cash. The GSTR-3B (due 20 April) was filed and the cash paid on 5 May. Compute the interest under Section 50 at 18% a year.

Show the solution

The due date is 20 April. Delay runs from 21 April to 5 May.
Days in April: 21 to 30 = 10 days. Days in May: 1 to 5 = 5 days. Total delay = 15 days.
The return was filed late, so interest applies only on the tax payable in cash, ₹2,00,000. The ITC portion of ₹3,00,000 is excluded.
Interest = 2,00,000 × 18% × 15 ÷ 365 = 36,000 × 15 ÷ 365 = 5,40,000 ÷ 365 = ₹1,479.45.
Rounded to the nearest rupee, interest is ₹1,479. It must be paid in cash.

Answer: Interest under Section 50 is ₹1,479 (rounded), charged only on the ₹2,00,000 payable in cash.

Example 2

M/s B has a monthly GSTR-1 due on 11 July. It files the return on 31 July. The question gives no late fee rate. Compute the late fee under Section 47 at the statutory rate, and state whether the cap applies.

Show the solution

Delay runs from 12 July to 31 July.
Number of days = 31 − 11 = 20 days.
The question gives no rate, so use the statutory rate. CGST late fee = ₹100 × 20 = ₹2,000. SGST late fee = ₹100 × 20 = ₹2,000.
Total late fee = ₹4,000.
Each Act's cap is ₹5,000. ₹2,000 is below the cap, so the cap does not apply.
The fee must be paid in cash. GSTR-1 is only a statement of outward supplies and carries no tax payment, so no interest arises on filing it late. Only the late fee applies.
Note: this working uses the statutory rate only because the question gives no rate. In practice, the actual late fee for GSTR-1 is governed by the notified rates and caps. If the question had given the notified rate of ₹50 per day (₹25 + ₹25), the late fee would be ₹50 × 20 = ₹1,000, subject to the notified cap.

Answer: At the statutory rate, late fee is ₹4,000 (₹2,000 CGST plus ₹2,000 SGST), and the cap does not apply. The actual GSTR-1 late fee in practice is governed by the notified rates.

Exam tips

Read the question for a stated late fee rate and cap. If given, use them. The notified rates are ₹50 per day (₹25 + ₹25) for normal returns and ₹20 per day for nil returns. Use ₹100 plus ₹100 per day with the ₹5,000 cap under each Act only when no rate is given.
Always show the day count as a separate line. Many marks are lost on counting errors.
For MCQs on consequences, remember the standard triggers: six continuous months (regular) or three consecutive tax periods (composition) for cancellation; under Rule 138E, e-way bill restriction when a regular taxpayer has not filed GSTR-3B for a continuous period of two months or more, or a composition taxpayer has not filed Form GST CMP-08 for a tax period; and three years for the time bar on GSTR-1, GSTR-3B and the annual return.
Say clearly that late fee and interest are payable in cash. This is a favourite one-line point.
In a written answer, quote Section 47 for late fee, Section 50 for interest and Section 29 for cancellation.

Practice questions from Returns

Late Fee, Interest, Nil Returns and Return Compliance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Late Fee, Interest, Nil Returns and Return Compliance: frequently asked questions

What is the late fee for GSTR-3B and GSTR-1 under Section 47?

The statute fixes ₹100 per day under CGST and ₹100 per day under SGST/UTGST, with a cap of ₹5,000 under each Act. The Government has notified lower rates: ₹50 per day (₹25 CGST + ₹25 SGST) for normal returns and ₹20 per day for nil returns, with notified caps. In the exam, use the rate given in the question, and the statutory ₹200 per day only if none is given.

Is interest under Section 50 charged on the whole tax?

No. Interest is charged at 18% a year on tax paid late. When the return is filed late, it is charged on the tax payable in cash, net of ITC available in the electronic credit ledger, from the day after the due date to the date of payment.

How do I file a nil return in GST?

File the return with zeros when there is no outward supply, no ITC and no liability for the period. A nil GSTR-3B can be filed on the portal. Failure to file attracts late fee, though the amount is lower for nil returns.

What happens if I do not file GST returns?

You pay late fee and interest, and later returns such as GSTR-1 may be blocked. Under Rule 138E, outward e-way bills can be restricted if a regular taxpayer has not filed GSTR-3B for two months or more, or a composition taxpayer has not filed Form GST CMP-08 for a tax period. Registration may be cancelled after six continuous months of non-filing for a regular taxpayer, or three consecutive tax periods for a composition taxpayer.

Is there a time limit to file a late GST return?

Yes, for some returns. Sections 37, 39 and 44, as inserted by the Finance Act 2023, bar filing of GSTR-1, GSTR-3B and the annual return after three years from the due date. It does not extend to every return, so check the notified provisions.